People have not always agreed with my analysis and that is OK. Everyone is entitled to their own opinion. There have been several things that I have been saying over the last 2 years that cause many dinar investors to doubt my opinion. But I would like to rehash a few points and put those points in a present day scenario.
I have always said that there is more currency outside of Iraq’s borders then in its borders. Iraq only has about 5 trillion dinar inside the country today. That would mean that there is a lot of excess currency presently outside the border of Iraq today. I calculated a figure of 25 trillion. I was using the difference in the currency supply going back to 2005/2006. This was a very conservative number and I gave a conservative number on purpose. In my mind I knew there was more but I would proclaim that there is at least 25 trillion dinar outside of Iraq in my posts/articles. People thought I was crazy.
The other part of the Puzzle is simply this. When dinar leaves the country it is exchanged for U.S. Dollars. This action brings U.S. dollars into Iraq as the dinar leaves. So using very rough numbers 25 trillion dinar is about 25 billion U.S. dollars. That money goes into the central bank’s reserves and it is used to back the dinar. So as the reserves grow the dinar currency supply also grows. The more dinar Iraq exports the more dollars come in and this means more dinar goes into circulation to cover the gap that the exported dinar made. This has become a vicious circle and no Guru has been able to explain it.
Yet another part of this puzzle is Iraq’s currency laws. I have pointed out several times that in section 32 of Iraq’s currency laws it is illegal to export their currency outside of Iraq and that the dinar can only be used within Iraq itself. Now this is a law they do not enforce because to do so would stop the flow of U.S. dollars into Iraq’s reserve supply!
The last part of the puzzle is the redenomination that Iraq may do one day. If it happens then Iraq will not honor the currency (25 trillion) that is outside of its borders. They will only honor the money within its borders. Iraq will cite its currency laws as the reason for doing this. They will say they have every right to do this.There are no international treaties with Iraq that protects investors should the dinar redenominate. I presented links with facts throughout this site. Basically this means that Iraq will be able to keep every U.S. dollar it imported into its reserves and the central bank has a large amount of imported U.S. dollars.
I have been saying this for the last 2 years. I have said that this scam goes all the way to the top. Now I am going to sound really crazy. I would ask that you read this entire post to the end and click on the links for they will be very important in my conclusions.
I believe the Iraqi government knew all along (ever since 2004) that they were scamming the poorest of American people out of their hard earned money with the false promise of wealth. I think the highest level of government in Iraq and the central bank had this planned all along! I think they are the ones who actually set this whole thing up to begin with! I even suspect that they had help from the Coalition Provisional Authority or CPA! This is just my opinion but in my view this is the only thing that makes sense to me given Iraq’s history. These guys at the very top and at the planing stages of the new Iraqi government set this up! This explains why America has done nothing to stop this scam! Now let me show you something. Read this article from Forbes
The Dinar’s Dismal Future: Sell Now
Let me provide just two quotes
“Iraq is basically enmeshed in a brutal civil war without any cohesive social fabric to pull it back together. Except for some military advisers, the U.S. and Western powers are staying out of the country”.
“Although no regulator knows how many investors hold the dinar, Prof. Bunting estimates “that there are around 40 trillion Dinar in circulation and only about 5 trillion actually reside in Iraq so the rest is held by dinar speculators around the world”.
This means that there is much more than 25 trillion dinar outside of the borders of Iraq. According to this article there is now about 35 trillion dinar that is now outside Iraq’s border. That also means that this added well over 35 billion to Iraqi Central Bank’s reserves and this money came from people all over the world. I am willing to bet that some of the poorest of Americans sent Iraq Billions when they collectively purchased dinar from dealers.
My numbers were conservative because I did not want to overstate my case. I wanted to be as factual as I could without exaggerating numbers. But now it seems that something more serious is on the horizon. As stated by the article above, Iraq is dealing with civil war and Iraq has another serious problem too!
Syria Iraq: The Islamic State militant group
“Under its former name Islamic State in Iraq and the Levant (Isis), it was formed in April 2013, growing out of al-Qaeda in Iraq (AQI).”
“Its precise size is unclear but it is thought to include thousands of fighters, including many foreign jihadists.”
“The US said the fall of Iraq’s second city posed a threat to the entire region. It may also have made ISIS the most cash-rich militant group in the world”
“Initially, the group relied on donations from wealthy individuals in Gulf Arab states, particularly Kuwait and Saudi Arabia, who supported its fight against President Bashar al-Assad.
Today, IS is said to earn significant amounts from the oil fields it controls in eastern Syria, reportedly selling some of the supply back to the Syrian government. It is also believed to have been selling looted antiquities from historical sites.”
Remember I said earlier if Iraq redenominates? I think the current Iraqi government has planned to redenominate all along. But if the government falls then what happens to the currency? What happens if Iraq is torn apart by civil war? Here is a worst case scenario.
What happens if ISIS over takes the CBI and Gains access to their reserves? What kind of weapons could they fund with the 35 billion that everyone around the world sent Iraq because they were deceived into believing that they were going to be rich if they bought dinar?
These are interesting questions. What happens to the dinar if the government falls or if it gets divided up into sections? it may very well be that the Kurds have one region of the country and the rest is divided among Islamic factions. However if Iraq gets divided up the real question is who gets the reserves that are left over in the central bank when the current government collapses? If ISIS does gain control of the central bank it will have new found wealth to fund its war machine.
There is one last component to all of this. The dinar is exported and sold around the world even though Iraq says it is illegal to do this. Third world nations and the poorest of people have been robbed by Iraq! There are people in these countries that make so little that a major investor in this country may only be able to get one 25,000 note. Some may have One 10,000 note or even one 1,000 note.
This means that there are millions of people around the world that purchased dinar.When this thing collapses (and it will collapse) poor people who invested in the dinar around the world will be devastated. So while this country proceeds with their quest of ripping off the poorest of people around the world there are major uprisings within the nation of Iraq! This creates several scenarios that could play out.
Iraq could redenominate and make all of the currency outside of its borders null and void. Iraq could fall and the government could be divided in approximately three different ways. ISIS could gain complete control over the region and raid the reserves. I highly doubt that ISIS will have any regard for dinar investors around the world. It amazes me that people still choose to believe in this scam in light of all the evidence. The Middle East is becoming more and more dangerous. This is not a good place to invest your money!