Popular Pumper Lines (9/24/11)

Like the list of pumpers, this isn’t a complete list by any means.  Just some that come to mind that you might want to be aware of.

  • They’re celebrating the RV on the streets in Iraq.   This line of manure has been used repeatedly.  First of all most Iraqis don’t know any more about currencies and economics than most Americans do, if that much.  (When have any of us ever thrown a party because the US dollar gained ground against the euro or the GBP?)  Any revaluation of their currency will only affect their purchasing power outside of the country.  Unless said Iraqi is planning a trip outside of the country or they’re involved in a business that imports products they would probably have no reason to celebrate.  Most of the celebrating people see is probably related to soccer, a wedding, or a holiday.  Then again the lying douchebags who tell you about the celebrating might just be making it up.
  • The RV is done and they’re going to announce it in the mosques.  This one appeals to western ignorance about Arab culture.  We seem to buy the idea that all big announcements take place in the mosques.  First of all, many Arabs aren’t muslims.  Remember Tariq Aziz, Saddam’s right hand man?  He was a member of the Chaldean Catholic Church.  Contrary to popular belief there is a certain amount of religious freedom in Iraq unlike their neighbors in Iran.  And second, when has any significant announcement about monetary reform ever been announced in mosques anywhere in the Arab world?  These announcements are made within the CBI, GOI, on television …. the same kind of places you’d expect here in the states.
  • The back screens at the banks are showing the new rate.  Another proven pumper trick.  Novice investors are led to believe that the pumper has access to a secret rate on a hidden screen.  The only back screens used in banks are for testing their networks.  No usable data is displayed.  Pure BS.
  • Bush/Obama just signed off on the RV.  Countries revalue their currencies all the time.  There’s no need to have the president of the US or Tony Blair sign off.  They just make the adjustment within their own country through their central bank.  The only other party that might have a say in it is the IMF.
  • Bush/Obama is the holdup.  Same as above.
  • They’re cashing in their dinars for the new rate in Dubai/Kuwait/Jordan.  When the RV occurs the new rate will be internationally displayed within minutes and nobody will be cashing in in one country ahead of any other country. The only exception would be if the new lower denoms were made available in Iraq prior to the IQD being traded internationally at a new rate.   The Iraqis wouldn’t really be “cashing in” per se since there would be no increased purchasing power for them.  They would simply be exchanging one form of currency for another.  Variations of this line include “They’re cashing in at Bank of America” or “They’re cashing in dinar at the new rate in California”.  No they’re not.  Not until a new rate is displayed on the CBI website and then the rate will be effective everywhere.
  • The manager at XYZ bank said that they’re expecting the RV next week and they’ve notified all of their employees to be ready to work extra hours servicing all of the people cashing in.  Bank rumors are the most commonly used tactic by pumpers.  Maybe because they sound so authentic.  First of all do we really expect lines of people to show up?  Most people have never even heard of the dinar, and unless there’s going to be an RV of a dollar or more which I’ve already addressed isn’t going to happen, there’s no reason to expect any kind of a line at the banks.
  • Obama/Hillary/Biden/Bush is in Iraq/Kuwait/Jordan/Wherever to take part in the RV announcement.  This has been used quite a lot because being prominent representatives of our government they all travel a lot to the middle east.  It means nothing except that they are there working (presumably) on behalf of our foreign policy interests.  If there is ever any significant revaluation there’s no reason to believe that it will be accompanied by any ceremonies.  RVs happen all the time with little or no fanfare.
  • Congress is passing new tax laws in preparation for the RV.  Congress is always tweaking the tax laws.  Have been as long as I’ve been old enough to vote and pay attention to these things.  It means nothing.
  • Donald Trump bought 30 million dinar.  There’s nothing about this in any major news or business publication.  The only place I’ve found where this was reported was on a site called Black Hills Portal.  A quick glance at this article will tell you that it’s not a respectable journalist writing it.  Too many grammatical errors.  But that hasn’t stopped this shabbily written story from an online rag from being cited by numerous pumpers to hype the dinar.
  • The Iraqis are proud people and want their currency near the value of the Kuwaiti dinar.  Maybe they want it there but it ain’t gonna get there.  Not any time soon.  Currencies aren’t valued by pride.  They’re valued by economics.  Saddam set the value at $3.22 and the international community rejected it just like they’ll reject a similar value by the current Iraqi government if they attempt it.
  • Iraq will need to RV close to the Kuwaiti dinar or they will have too much of a competitive advantage when selling their oil.  Nonsense!  Saudi Arabia, Qatar, and the United Arab Emirates are also selling their oil and their currencies are all around 27 cents.  Besides, OPEC oil is sold in petrodollars, not regional currencies.  So whether the oil comes from Iraq, Kuwait, Saudi Arabia, or any other OPEC country it will be sold in US dollars and then converted to the respective nation’s currency.
  • There are two prices on the items in the stores in Iraq for pre-RV and post-RV.  Easily debunked.  All you have to do is talk to somebody in Iraq and ask them if they see two dinar prices and they’ll tell you “no”.  They do have two prices on products in many stores, but one of those prices is the USD.
  • They’ve removed most of the larger bills from circulation in Iraq.  No they haven’t.  Just like above, ask somebody in Iraq how hard it is to get your hands on a 25K note.  No problem.  They’re everywhere.  This line is often accompanied by a reference to an article announcing the removal of 70% of excess liquidity which has nothing to do with removing larger notes from circulation.  Excess liquidity is the amount of money a bank has beyond what they are required to maintain.
  • The new value will have to be over $3 for the Iraqis to meet their budget.  This one is believed by a lot of people, not just pumpers.  It’s based on an assumption that Iraq will be paying for everything with the dinar, but Iraq is currently using at least three currencies –  the dinar, the US dollar, and the euro.  Currencies aren’t valued based on what’s needed for the budget.  They’re valued based on what the country can justify with their GDP and/or hard assets.
  • Iraqi government workers haven’t been paid in months because they’re going to be paid at the new rate.  This has been used for a couple of years.  Think about it, how long could people in a poor country like Iraq afford to go without being paid?  Maybe a month or two but a year or more?  There would be massive rioting.
  • Shabibi admitted to putting out propaganda.  This supposedly means that Shabibi is admitting that Iraq is putting out bogus information about a re-denomination or “lop”.  If you listen to what he said though it’s clear that he’s referring to the campaign to educate the Iraqi people about the upcoming changes in their currency.  (If you watch the video the word “propaganda” is used around 7:45 into it.)
  • Bush signed Executive Order 13303 to give us the right to own physical dinar.  All you have to do is google EO13303 and read it to disprove this one.  It was written to protect the Development Fund for Iraq (DFI).  It says nothing about the dinar, currency, or money.  I’m not saying that owning dinar is illegal, but for those who question whether or not Iraq is obligated to honor the currency held by speculators the response is often about this executive order which says nothing about the matter.  This is more pumper BS about the Bush administration putting a plan together to make trillions for the US and billions in tax revenues by scooping up a deflated currency and then RVing it.
  • Bush said that the war would pay for itself and the RV is how he planned on making that happen.  No he didn’t.  Nobody has ever provided any evidence that Bush said this.  This was a claim made by Bush’s political opponents that was picked up by dinar pumpers, but Bush never said it.  The closest thing to this claim is Wolfowitz and Rumsfeld saying that Iraq’s oil revenues could help pay for the reconstruction.
  • When you buy dinar you’re buying stock in the nation of Iraq, and as their economy grows your stock will go up in value.  Oh really?  Let me ask you this.  Has our economy grown over the past 17 years?  Of course it has.  In fact, the US GDP has roughly doubled since 1994.  Has the value of the US dollar increased on the foreign exchange since then?  Umm … no, not at all.  In fact it has gone down.  Hmmm …. So much for the “stock in Iraq” theory.US Dollar Index 14-Year Chart - Usdindex (Chart 1)
  • Deleting the zeros means removing the larger notes with three zeros.  Wrong.  Deleting the zeros, cutting the zeros, removing the zeros, lopping the zeros …. etc. has always meant a redenomination or “lop” in the world of currency.
  • The current value is a dirty float or “artificial”.  Take the amount in Iraq’s foreign reserves (about $60 billion USD) and divide it by the number of dinar in their M2 (about 70 trillion) and you’ll get something pretty close to the current value.