The Iraqi Dinar Devalued-No RV (Revalue)

You heard right. The rate just adjusted again. It is now trading at 1190 to one U.S. dollar. Sam i am predicted the rate would drop a while back on a conference call. So with that in mind an updated conference call just took place. Topics include how far the rate will drop and the future of the dinar. Here is the call in its entirety.

Of course, many of the dinar holders on YouTube did not like this news. We have been going at it pretty hard and heavy in the comment section. Some of the commenters came back and deleted their comments when they realized we were telling the truth. One of the people who has been leaving comments is a guy by the name of haissemweneht. When we were talking about the strength of the dollar he had this to say

“Remember when gasoline was worth 1 dollar per gallon? The value of the US Dollar is 14 – 16 percent less than a few years ago. Now gas is 3 dollars. I would say that the dollar is worthless.”

This is total GCR propaganda nonsense and this is what these guys do. They confuse economic terms and rant like idiots! The big mistake in this GCR talking point is the fact that they are taking a nominal inflation rate and judging the strength of the dollar by it to make the claim that the dollar has lost global value.  These are actually two different things blended together to look like one thing. They are comparing inflation rates with exchange rates and claiming the dollar is weak!

First, we are talking about the global value of one currency against another currency. Let me give you an example. When we were invested in the dinar it took 1166 dinar to get one U.S. dollar. Today it takes 1190 dinar to get one U.S. dollar. This means that the value of the dinar has gone down and the value of the dollar has gone up. In fact, if you research this you will discover that the dollar is a lot stronger globally than most people know!

We are not talking about national purchasing power. We are talking about exchange rates not Inflation rates! If we were talking about inflation then it would only be fair to compare the United States inflation rates with other inflation rates. Let’s take his gas example. Gas went over a dollar in the 1980’s. In 1986 Gas was about 1.18 a gallon. That was 32 years ago. Now let’s look at what gas cost in England 32 years ago and compare that price with today’s price in England. By this dumb logic we would conclude that the pound is completely unstable.

Every country has inflation. That is a side effect of a decent economy. When the economy goes bad you have deflation or worse, hyperinflation. All currencies lose purchasing power over time. Even the dinar loses purchasing power and it had hyperinflation during the 1990’s. He was comparing the inflation rate of the dollar with the exchange rate of the dinar. These are two different animals and it is a really bad argument. The dollar is strong compared to other currencies, not inflation rates.

This is the type of typical GCR nonsense used to sell precious metals and dinar gurus steal the same talking points. They need the dollar to tank in their presentations in a feeble attempt to make the dinar look like a good investment.

Just as a side note, look at the name of our commenter who was spreading this nonsense. The name haissemweneht is actually the new messiah spelled backwards! I don’t think I would trust anyone who has a name like that. Thanks to Nash for pointing that out!

7 thoughts on “The Iraqi Dinar Devalued-No RV (Revalue)

  1. I’m a dinar investor from 7-8 yrs ago. Stopped reading gurus about 4-5 yrs ago and haven’t lookrd at much in the last few yrs. i’m Taking it from the general attitude of this article that you don’t think an upward trend of value for IQD is possible? Or just not at the rates people were talking about? Could u clarify?

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    • If you’re still monitoring this blog I’ll give you the answer: NO. That is not an opinion or guess. That is a mathematical certainty. As Marcus and Sam and others have explained, the value of a pegged currency is ALWAYS going to be within a few pips of the number of currency units divided by the value of foreign currency reserves. I haven’t looked in awhile but, at last check, Iraq had over 90 trillion currency units and only 65 billion or so in foreign currency reserves. Do the math and you realized the value is right where you would expect it. Unless Iraq plans on stealing massive amounts of dinar deposits out of their banks they cannot change that. No nation cab simply flip a switch and increase the value of their currency by declaration. It’s absurd. You’ve been bambozzled.

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  2. LOL! I’ve been away from all the ridiculousness but it looks like I haven’t missed much. More of the same. I’ll have to visit one of the dinar forums and see how the clowns are spinning this. Should be good for a chuckle.

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  3. Gentlemen, I am new to your site and your educational platform. How do you then explain the value of Kuwait’s currency (their economy and their oil reserves) as compared to the Iraq when theirs is over $3.25 per USD? Is that purely based upon the amounts of currency in the market?

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    • I should say briefly that there is much less Kuwaiti dinar currency in circulation. This is one reason why their currency value is higher.

      There is some deception in this area. There never was a Kuwaiti revalue. A revalue is something that is controlled by the central bank. It only happens to pegged currencies. In Kuwait’s circumstance, their currency fell when the country was invaded. The central bank shut down and never controlled the rate. When the country was liberated the value came back. The value of the currency drop was not central bank driven as the gurus imply. The value of the currency drop and future rise was market driven because of the war. The revalue is portrayed as something the central bank of Kuwait did, but the central bank never revalued their currency. So to use this as an example of why the central bank of Iraq will revalue its currency is really deceitful.

      Oil reserves have nothing to do with currency values. Many people confuse oil reserves with other assets that actually back money. Currency reserves are things like precious metals, T-bills, and other currencies.

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