By Tom Cleveland, market analyst for Forex Traders, exclusively for Iraq Business News. Forextraders.com is an online resource for the foreign exchange market.
“Buy on the rumor, sell on the news” is a time-honored investment phrase that is oftentimes more confusing than the wisdom it attempts to impart. The meaning relates primarily to company securities that appreciate in expectation of a big news announcement. Early speculation drives ups the price, such that when the real announcement is made, most investors sell on the news to take their profits, often driving the price down, rather than up. “Pump and Dump” stock frauds also follow a similar scenario, but in this case, criminals benefit and investors lose.
A similar situation has been building for years, some say as many as eight years, surrounding the potential “revaluation” of the Iraqi Dinar. As the rumor would have it, the Iraqi economy has stabilized, and the potential for enormous foreign currency reserves from increased oil exports will drive the value of the Dinar to unconscious levels versus the U.S Dollar. The government authorities will be forced to revalue the currency from 1,175 to 3 per Dollar, resulting in an outrageous windfall for anyone owning stockpiles of the currency. Does something here sound a little too good to be true?
In actuality, the Iraqi Dinar, or “IQD”, is a “controlled” currency. The central bank of Iraq determines the exchange rate and must support that rate by maintaining adequate foreign currency reserves to handle capital flows across its borders. The IMF permits countries with a transitional economy to implement currency controls in order to stabilize their economy during its redevelopment phase. Presently, international banks will not accept the Dinar, and it is not traded on any forex exchange. Actual purchases can be made through currency dealers that have been authorized to buy and sell banknotes that are already in circulation.
Stew I'm not only investing in Iraq because of the RV possibility. The country itself is set for great things over the next 10 years. Seriously do you think 200 bucks spent on dinar has worst off odds? I can get my money back at any time. You can't do that with lottery tickets Stew. I'm not sure what your agenda is but its my money I'll spend it any way I want and you spend yours whatever way you want. Not sure why you are so obliviant to the obvious. The Iraq dinar in all aspects is a good bet to make money possibly short term and certainly long term.
Tom... Iraq is about to start the process of redenominating the dinar and removing 3 zeros.
That means the about 200,000 dinar you get for $200 will have to be turned in for about 200 dinar worth $200.
Dinar dealers being the great guys they are will probably take $50-$100 for this service. You are probably going to lose about 50% of your money on an investment that ZERO chance to work out as advertised by the scammers that will have your money.
stew so how will we lose 50% on our money if say 200,000 cost us 200 bucks when we bought it and when we turn it in and get 200 bucks for it with your lop theory to me sounds like we get our money back
Where do you think you're going to turn it to Rich? Don't count on a bank buying it from you, they probably aren't going to deal with a redenominated currency. Even if they do they wont offer anywhere near the actual value. The e-bay option will dry up because the word will be out that it was a scam, so e-bay buyers will be very rare. You will most likely be stuck selling back to the dinar dealers. All of the dinar they have sold over the last 8 years will suddenly be pushed back at them in a very short period. My guess is they will drop their buy back rate pretty substantially because you will have no other options. There is also a chance that Iraq cracks down on currency coming back into the country since it was against the law for it to leave the country in the first place. That might scare the dealers away from dealing with it and leave you stuck with worthless paper.
I'm still waiting for that link you said you'd get me. For one of the many articles you claim that Iraq stated the dinar would be a world reserve currency.
I just went to a dealer site Rich… currently with shipping included you can get 250,000 dinar (25k notes) for $321
Or if you fall for the small denom scam being pushed the same 250,000 dinar (500 denomination) cost a cool $951
Once the redenomination happens I’m betting the buy back rate drops to about $600 per million, so for your 250K you’ll get $150 back. Plus you’ll have to pay for shipping, so another $25. That results in $125 back.
So $321 invested, $125 back. That’s a 61% loss.
For falling for the small denom scam…
$951 invested, $125 back. That’s a 87% loss.
I'll be happy to calculate your expected losses for you if you tell me how many you have and what you paid for them.
The accountants and tax advisors the gurus have been pushing people to pay for services from... maybe they can inform you if your loss will be tax deductible.
stew it is not illegal for us to have it bush made it possible for american citizens to invest in iraq when he was in office and where are you getting your numbers from that doesnt even make sense i can go to gid associates and get 250,000 for 280 bucks right now and i wilkl get you that article forgot about that been busy
Stew I'm not sure how well off you are but like I said 200 bucks is two tires on your car, a half @ss dinner for you and your wife, a dink around night at the casino, etc... its not very much. I said it before the up side although of course skeptical by those who choose to be such as yourself is hugh. If it does drop 3 zeros I don't give a rats @ss. I won't sell them I'd put them in a frame and hang em on my wall just for the hell of it. If you're lucky I might even put a caption on the bottom (in fine print) "told you" your friend Stewy...lol. Where will the dinar be in 10 years, 20 years etc. I'll give em to my grandkids.
Its a no brainer if you can afford it. I'm not staking my lifes savings on it. I treat it like a penny stock speculation, and so should anyone else. Don't buy it if you don't have two nickels to rub together to stay warm.
Tom… sorry, but I’m not going to change my opinion on this based on the amount invested. As far as I’m concerned a scam is a scam is a scam, whether you lose $20 or $200,000.
Stew,
I respect your views. So in good fun If my views of no LOP and a strait up RV occurs, I would like to make a $200 donation in your name to your favorite charity. Just post the name of it and we'll move on. Thanks for the discussion.
Edward,
The bet should be that when it LOP's, YOU should pay up. If it RV's (lmao!) Stew will pay up.
edward i think we should extend that deal to lz too lol guys are gonna be sorry might wanna think about getting some lol
The people who are all against this should just be against it, keep their mouths shut and let those of us who are having fun with it just have fun with it.
Gee-Wilakers ...
Get a life ...
So What ...
A fool and his money are soon parted ...
But it's fun to be foolish sometimes...
Try it ... You may enjoy it
Life is short and you only go around once. But if you do it right and have some fun and some dreams along the way ... once should suffice.
Ric... most of the dinar boards are set up just for that. Places where no opinion other than big RV is allowed. Maybe you should limit yourself to those sites if reality so interferes with your fantasies.
It may be hard for you and many dinar holders to believe... but there are people that actually want to hear the truth.
How about the us govt buy every american one million dinar that's only around $360,000,000 thats chump change to the feds, they will throw that much at any old solar panel plant, then when it hits we will all be instant millionaires and all the problems facing america are solved! It will be like the feds buying all of us a lottery ticket,as a nation we will never miss 360 mil. sounds like fun to me!
Liz,
The reason I stated the $200 donation in Stews name is because basically he is a cheap A$$ and all talk. If he would buy say $200 worth of IQD. And it R/Vs, he could afford to donate more than $200 to his favorite charity. Instead I will donate the money in his name all $200 of it, and unfortunatly for his charity, that's all their gonna get from this investment. My charity/non-profit is gonna get alot more than $200 from me. That's how confident I am in my descision to invest in Iraq. Hey Stew what's your favorite charity?
Ed
I’ve made the offer to any pumper who’ll take it up, and I’ll make the same offer to you. We both put up $100K (that’s dollars, not dinar). Have a lawyer draw up the papers and hold the money. If it redenominates like I say, I win. If it RVs 100,000% or more like you and pumpers claim, you win. Heck… if the current dinar even RVs to 1 penny I’ll pay off the bet.
When I win I’ll donate 50K of your money to any legitimate charity you choose.
Stew,
I made my offer in good fun to your charity. I'm not a pumper, nor am I a man who has an extra 100K lying around to put on the table in some rediculous bet. I'm not so insecure that I have to prove my manhood, or how deep my pockets may be. It's obvious I've offended you and I'm sorry. My good fun charity donation offer was intended to simply put my integrity on the table regarding this investment for the benefit of others. I support the " Make a Wish Foundation" how about you Stew?
Ed... you called me "a cheap a$$ and all talk". Guess I missed the "in good fun" part of that.
Make A Wish foundation is a fine charity.
I checked about all the hype on the dinar.I see the USA bought 3.7 trillion,Bush family,and D.Trump bought..I can afford $300.00 to play and wont miss it..I see Exxon,Shell,Norwiegian,amd many others wants to play ball with Iraq..
@ryan: can you please provide some evidence of the dinar purchases you mention.
Thanks in advance,
Editor
Stew maybe check this link out...http://www.dinarindex.com/
Let me know what you think
Just another dinar dealer site.
Tom... do you know what a redenomination is?
Iraq has been announcing for months now their intentions to redenominate the dinar. They have even gone so far as to say they will start it in Sept.
What do you think that means?
I'll give you a bit of a hint. In recent history redenominations have happened about 100 times. In EVERY redenomination, not some, but EVERY redenomination envoles issuing a new currency to replace the old currency. It is almost always done by reducing the currency by a factor of 10. So 10, 100, 1000, 10000, 100000 and so on. So if a country says 3 zeros, that means a facor of 1000.
So in every redenomination people turn in the old currency for new currency. In the 3 zeros cases, they turned in 1000 old to get one new.
Again... what do you think this means for people holding dinar half way around the world in a shoe box?
Yep I know. And I'll take my chances and hang onto them. Like I said Stew the upside is so large its worth gambling on. For the few hundred bucks it cost to get into its worth it. Think of it more like a long shot with little loss if it doesn't go through. I know you will say it will never go through snow ball chance in hell etc. But you don't actually know that for sure. Even if it does the 3 zero back off I'd still switch them over at some point and hang onto them. Iraq is an awsome place to invest in. When things settle out its dollar will again be worth at least 3 to 1 US buck.
Tom...The upside you are referring to is all based on lies. You are basically saying you believe all the dinar douche bag lies and you are keeping faith in a made up story. I bet if Jim and Tammy Fay Baker were alive today they too would be pushing dinars.
Tom... I know you only havea a little invested in this and to you maybe that's just pocket change. I wish everyone invested only had that little in it. But that's not the case.
Iraq backs their currency 100% with foreign currency reserves. That's why they talk so much about it. They back the entire money supply, the M2. They have about 60 Trillion dinar M2 and about $60 Billion FX reserves. That's why their rate is about 1000:1. Thay havestated a number of tmes that they plan to continue 100% backing in the future.
The reason they had the $3 rate back in the early eighties was they had only about 20 Billion dinar M2 and they had $60 billion FX reserves. So the FX reserve to M2 ratio was 3:1. That's why they had a $3 exchnage rate.
So when they lop 3 zeros from the current 60 trillion M2, it will become 60 billion M2. With the current $60 billion FX reserves, that gives them a M2 to FX reserves ration of 1:1. So the exchange rate will be about 1:1
For the new dinar to get back to 3:1 they will have to increase FX reserves up to $180 billion while keeping M2 at 60 Billion. Not going to happen. First it would take 10 or 20 years to increase FX reserves that much. And that's if they could keep the Gov hands off of them. Secondly... as the reserves do grow, the M2 is sure to grow at about the same pace, maintaining the 1:1 ratio.
Stew,
We all know that a considerable amount of Billions were transferred back into Iraqs control last June 2011 from the DFI fund. We also know that the total amount in billions of $USD never has been reflected in the value of the Dinar. We also know that the frozen accounts of Sadaam have never been included in the FX reserves of Iraq nor the total amount released back into Iraqs control. Right now there is 17 Billion USD still in the residual DFI fund that is under gaurdianship with the US&UN. There are also numerous accounts worth $Billions that Iraq has stashed all around the world which still are not reflected in the CBI Dinar rate. In your research, have you any articles or links that may give us get more clues as to what Iraq is holding back on the sidlines?
http://dinardouchebags.blogspot.com/2011/09/pumpers.html?m=1
anyone who thinks you will get rich with dinars....please read
Edward... there wasn't near as much in the DFI fund as dinar pumpers claimed. There was a report that said the DFI fund HAD TAKEN IN BILLIONS over the years. So what... the DFI fund was not a savings account. It was more like a checking account. Money was put into it and then spent. Last I saw the fund had about $1 billion in it.
I've taken a million in my checking account. You think I still have a million in there?
All frozen accounts were accounted for long ago... soon after Saddem was caught.
Here... I found this...
"Disbursements. To date, disbursements from the DFI have been in support of the wheat purchase program, the currency exchange program, the electricity and oil infrastructure programs, equipment for Iraqis security forces, and for Iraqi civil service salaries and ministry budget operations."
It clearly states DFI disbursments have supported the currency exchange program. Again, dinar pumpers/gurus lie.
Tom
Wow! Very interested in where you did your research for this article? You must also think the CBI is not real? Articles come out from them daily taking about deleating the zeros from the currency. Which means from the value not the note. If the note lost the zeros it would be a devaluation and not a revaluation. Which would firther hurt the Iraqi people. (Math wasnt so good either!) Not to mention they need to have a currency that reflects the true rate (with transparecy) to be a full member of the WTO which allows them to trade internationaly. So I really am embarrested for you. You might want to look into this further. This time looking to the news out of Iraq and rewrite the article with the facts. Is this going to happen tomorrow no! But Hillary and the IMF are real and stated Iraq will be the fastest going ecconomy in the coming years. Since they are both involved in this country I tend to go with what is said by people in the know. You sir are in the dark. Plus not that long ago banks where ordering the Iraqi Dinar for customers to buy. Law passed my Mr Busch allowing us to hold this money. The Dinar wont be on the Forex until it is nationaly traded.
Good grief Laure. Deleting 3 zeros from the currency means they will reduce the money supply by 3 zeros. They currently have 30 trillion dinar in circulation. They will delete 3 zeros and end up with 30 billion dinar in circulation. That’s 3 zeros less.
They do this by issuing all new currency. You will have to give 1000 current dinar to get one new dinar. Again… a deletion of 3 zeros. If the current dinar is valued at .00085. the new dinar will be valued at .85. So it is not devaluation. If an Iraqi has $1000 worth of current dinar, he will receive $1000 worth of new dinar. No loss, no gain. That’s why they can so openly talk about the process.
You seem to think they are openly discussing a 100,000% increase in the value of your dinar. And giving the whole world a 6 month or more heads up to buy all they want.
And you’re embarrassed for others?
Stew,
I'm so amazed that you have an answer for Almost every question. Yet you still have not explained what happened to, or the amounts of Sadaams frozen assets that have convieniently disappeared. Sadaams daughter was in control of estimated billions and it's all been swept under the rug, no trace. Believe you me,I have been watching the news for years regarding Sadaams daughter and those funds. What about the 17 Billion right now that Iraq is asking for a protective extension on? It's under conservatorship by the UN&US in US banks. These figures are NOT reflected in the IQD rate. We're talking $Billions here Stew. Iraq is still under sanctions and is not required to be fully transparent to the world. That's why this is a speculative investment. Not everyone is a fool a lier or thief who invests in IQD. According to your definition Stew, What is a speculative investment? And Stew could you please address ALL my questions and points and not just pick and choose what you have an answer for? Your trying to thoroughly help all us fools remember?
Stew,
I have more questions for you in regards to having to convert USD electronically into IQD and then buying stock on the ISX. You can only buy stock on the ISX with IQD. What happens to the value of my stock with the LOP theory? Have I been scammed by the ISX also? Have the Kuwaiti Bankers that bought over $5 billion in Iraqi Bank stocks last December been scammed?
Stew: thank you for the great article. Very informative, however,we have been reading this kind of stuff for a while. And while we wait, we look towards possibilities. I have a Iraqui bank account with "in country" currency. I also have physical dinar at hand. If it is a scam, then you and I have already been scammed since the first Gulf War. See, we have been at war with Iraq for 20 years, trying to get out paws inside. Finally we have done it, who has paid for this war??, You and I and the rest of the tax paying Americans... who reprinted the IQD in the early part of 2003?? Great Britain and USA after we burned the old Sadaam currency trading at 3.6 inside of Iraq. It is estimated that the USA hold about 125 Billion in IQD as reserves in the Treasury... Iraq is growing exponentially, and just like Google when it started, no one listening to the news would believe!!! It is always too good to be true, while "we bargain with life for a penny" Other than your great writing style, the article is full of unsupported speculation on your part, we can speculate on this part. Thank you for allowing this discussion.
Nothing will happen to the VALUE of your ISX stock. Just as nothing happens to the VALUE of your currency.
Say you have 1 million shares of Bank A, each worth 1 dinar.
The value of your stock is currently about $850
Once the dinar is redenominated one of two things will happen.
1. You will have 1 million shares worth .001 dinar each.
or
2. They will reverse split the stock and you'll have 1 thousand shares worth 1 dinar each.
In either case, the value of your stock remains $850.
Let me guess... you think the dinar will RV to $1 and your million shares will be worth 1 million dollars.
You do realize that would make most of these tiny Iraqi companies have a Market Cap larger than Exxon/Mobil.
[Comment removed by Editor due to offensive language]
lz your a complete idiot just today there was an article saying that inside of iraq they will be able to exchange their old dinar for new dinar at a rate of 1 to 1000 which tells me the exchange rate to the usd will be 86 cents for us that hold dinar.
Rich.....we shall see who gets the last laugh in Sept 2013.
Rich... so you think Iraq will force their people to exchange 1000 for 1, meaning no gain for them. Yet foreign currency speculators will get 100,000%? Is that the new pumper claim?
lz we aint gonna have to wait till september and stew their not gonna force them to exchange anything they'll get more if they do they will get more buying power than they have now approx.17 cents per dinar more as compared to now or about 4.25 on a 25 k note as compared to what they are getting now.
Stew, I hope you read my post before it was removed[why i don't know?] but why continue to try to save these folks that want to waste their money and enrich the scammers. We did our good deed to try to help, but some peeps are just unreachable. That's life.
Stew,
There you go again. you just will not even comment on the $17 Billion or other funds that Iraq has, or are unaccounted for that are not reflected in the IQD rate. So therefore a 100,000% increase in the IQD rate cannot be possible right? And regardless of your explanation on the ISX, you are saying that it's not a scam? So if I was using the ISX as part of my strategy to hedge the Dinar and make loads of $$, it may actually be possible? Stew you gotta follow the money$$ I'm buying what the Big Boys are buying in Iraq and that includes Dinar...
If you consider Okie Oil Man, Frank, Dinar Daddy, Medic, Adam Montana, Breitling, Kaperoni, Dan (Checkmate), Tony TNT, ect… If you consider them the big boys… then follow on my friend.
The $17 billion is part of Iraq’s foreign currency reserves. I have no idea what other fantasy funds you are talking about.
I have never once claimed the Iraqi dinar nor the ISX are scams. Convincing someone to buy into either based on some ludicrous 100,000% RV is a scam of epic proportions.
Stew,
There you go again showing how informed you are. NO the $17 Billion is not part of Iraqs reserve. Why do you think Iraq is asking the US & Un for protection and extension into 2013 against attachment of lawsuits? If Iraq had total control of this money and it was already counted as part of their reserve why would they officially ask for this protection? And the BIG Boys I'm referring to are the Kuwaiti Bankers I commented on several posts ago. There are other Big Boys too but I guess their all stupid for investing in Iraq too right? Secratary Clinton just released a letter on her depts. web site urging US companies to invest in Iraq. There are many ways to do just that Stew. And it could include buying Dinar or buying stock in companies. Now do you think the Secratary of State Mrs. Clinton is scamming Americans? Stew, you may not have used the word scam. But your inferances posted definetly say Dinar holders are stupid and have been scammed. Your Disciple liz gets so bent out of shape on trying to save all us idiot Dinar speculators that she has to be edited. This has got to be the weirdest investment I have ever been involved with. Crusaders trying to save others from Gurus!!
LOL... Edward. Are you telling me you think Iraq's $60 Billion in FX reserves are comprised of a pile of cash sitting in a vault in Iraq?
From 2005...
http://www.infowars.com/articles/iraq/iraq_deposits_5_billion_into_us_fed_reserve.htm
The Iraqi central bank has built up five billion dollars in reserves in recent months which have been deposited with the US Federal Reserve, a top US treasury official said Tuesday.
That was 7 years ago. I'm guessing they have added to the initial deposite.
Stew,
There you go again twisting either my comment or some article you read. Again please explain; Why would Iraq ask for an extension of funding protection into 2013 for the $17 Billion that is under gaurdiansip by the US & UN if indeed they were NOT in CONTROL of this fund? Therefore one can easily conclude this fund is NOT included in the FX reserves of Iraq. Can you please offer more current articles to support your position? 2005 is all you have really? No article on the $17 Billion? it's only 1 week old. What kind of Crusader are you? Have you checked out the State Dept. Web Site? Is Mrs. Clinton scamming Americans and American Companies?
Can you show me where Clinton ever mentioned the dinar or some 100,000% increase in the currency?
Advising someone to invest in Iraq is so far removed from claiming a huge RV I'm shocked you'd actually link the two.
Then again... you believe Iraq is announcing months/years in advance a plan to RV 100,000%. So I guess I shouldn't be shocked by anything you claim.
What dinar holders fail to realize is that speculating on a countries currency is almost the opposite of investing in the country. Many think of currency speculators as parasites. They are despised.
When Saddam ruled Iraq, if you were caught speculating on the dinar, it meant a death sentence.
Stew,
There you go again. Secretary Clinton encouraged investment in Iraq. Look it up on the State Dept's Web Site. There are many ways my friend to invest in Iraq. An investor needs a strategy and especially so with Iraq. You have made it clear in your last post your of the crowd of Sadaam, who think currency speculators are parasites and you despise them. So you need to be honest and quit masquerading as a crusader for all those who you believe are stupid a naive to be scammed by the IQD gurus and dealers. Well ok I'm a parasite and one things for sure. Parasites are survivors! and Sadaam is DEAD! DEAD! DEAD! The world needs even currency speculating parasites! Well I'm done now with this conversation to allow you the final post. The last word is yours Stew, so go for it.
Interesting read through the comments. The way I look at it the RD will happen irrespective, and for several reason:
1. Eliminate counterfeiting.
2. Reduce the notes in circulation.
These are the true legitimate purpose of a RD.
However there has to be a negotiated RV of the Dinar since Iraq has almost emerged from their bankruptcy and are now being recognized by the OPEC countries after its emergence from bankruptcy.
In the interest of both Kuwait and Iraq, the RV has to happen to manifest equality of trade and port services for both, Iraq and Kuwait.
So, I do forsee both. The RD and the RV. For those hanging on to Dinars, I am certain there will be a bump in value, IMO upto 45Cents on the dollar, and this should occur right after the RD.
Naturally there are lots of opinions out there. This is me.
I must add I have a few Dinars myself.
You are aware that a RD means they will issue a new currency. The new currency will be worth 85 cents. The current dinar will retain the currenct .00085 rate and will be turned in for new dinar at a rate of 1000 old for 1 new.