Why The Iraqi Dinar Will Never Revalue Part 2

podcast 7This is the second part of the discussion I had with Sam I Am as to why the dinar can never revalue like the gurus claim. Hold on to your hats and buckle up because now we are going deeper into this subject. We will discuss hidden strengths within the dollar that most people don’t seem to know about and we also talk about the reserves that back the dinar. What actually gives the dinar value? We have already learned that it is not oil.

59336-sam252822529If you are an investor and you were upset with the information in the last Podcast be prepared! This time your cage is really going to be rattled! Sometimes the truth is hard to accept, but we need to see everything in its proper place and in its proper role. So listen at your own risk and don’t shoot the messenger.

5575f-marcusWe will also go into gold and briefly cover the GCR. We will talk about conspiracy theories that keep this scam afloat. There are many aspects to this dinar scam and it is really a complicated mess. So now is your chance to get the facts. Most of this information can be found in my book The Truth About The Coming Global Currency Reset.

podcast 4Disclaimer

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Recorded on February 18th 2016

podcast 2Remember that you can meet us over at Dinar Daily.  Come talk with Sam or myself. Talk with all the Guru Hunters and get the facts.  If you want more information about the things we talked about check out the book The Truth About The Coming Global Currency Reset. If You want more information about gold and silver click on the Gold and silver links below.

Gold                 Silver

The Next Great Currency Scam (Mike Rothschild)

Over the past year, I’ve written quite a bit about the Iraqi dinar, the foreign currency that many self-appointed “gurus” try to convince buyers will suddenly “revalue” from being one of the most worthless currencies in the world to one of the most valuable. Dinar brokers sells bundles of the dinar that you can only buy in cash directly from Iraq, then you sit on it and wait for the Iraqi government (or President Obama, or the IMF, or whatever) to pull the trigger on boosting it hundreds of thousands of percent in value.

It doesn’t take a degree in finance to tell you that this is false. Many actual financial experts have debunked the myth of the Iraqi dinar “RV,” and while gurus have been promising for years that the magical day where millions of dinars turn into millions of dollars was right around the corner, it’s not, it never has been and it never will be. Iraq’s economy is nowhere near being able to support an electronically traded currency with serious value, and it might be a decade or more before that happens.

Fortunately, the dinar scam looks like it’s finally abating. There are numerous, well-written pieces by people at Forbes, Business Insider and others presenting well-researched and logical information about why the dinar is about as worthwhile an investment as magic beans.

The Vietnamese dong

Not only that, but law enforcement is starting to crack down on dinar brokers who exploit a loophole in currency law to sell cash as a collectable. Of the four dinar websites I mentioned in the piece, one, Sterling Currency Group has been raided by the FBI and shut down, while Bet on Iraq is now a dead link. Additionally, one of the most vocal dinar gurus, Anthony “TNT Tony” Renfrow, recently pled guilty to wire fraud in relation to a different prosperity scam – one that used many of the same techniques as the dinar.

But just as scams like the “Omega Trust” and NESARA begat the dinar scam, it’s only a matter of time before the resources put into selling and pimping this worthless currency is put toward selling and pimping some other worthless currency. Which one will it be? Here a few different national currencies to be on the lookout for as the next great money scam:

Vietnamese dong
If there’s one other currency that dinar gurus love to sell along with the dinar, it’s the dong. Vietnam has a complex history when it comes to currency, one intertwined with the fractured history of the country. Both North and South Vietnam issued their own currency, both called the dong, in the 1950s. When Vietnam was united by the communist insurgency in 1975, the dong was also unified. It went through several redenominations, lopping zeroes off the inflated exchange rate with old currency exchanged for new. For decades, Vietnam struggled with inflation, counterfeiting, and the dong’s lack of value against other currencies.

Finally, in 2003, Vietnam introduced new notes that were harder to counterfeit, and it developed a new banking system designed to handle large transactions.

Even with all of these reforms, the dong is one of the most, if not the most, worthless currencies in the world. It currently trades for around 21800 to one dollar, and only in cash, not electronically. Like the dinar, you can buy them in cash from brokers working under the “money service business” loophole. Like the dinar, the dong is massively overprinted. And like the dinar, they take a massive cut, usually charging between 20 to 25% more than the value of what you’re getting. And finally, like the dinar, the dong has lost value in the past year, as it traded at 21175 to one dollar one year ago. Dongs are becoming less valuable, not more.

But that doesn’t stop “gurus” from hyping them as the next great currency to rise when the “global currency reset” happens. They seize on minor details, like some US banks carrying dong to exchange for dollars. But there’s a simple reason for this – more and more Americans are traveling to southeast Asia, including Vietnam. While dollars are accepted, shopkeepers will usually round their prices up when dealing with dollars, making items more expensive than using the local currency. It’s not part of any massive currency reset, it’s just tourism.

The dong is a viable currency to buy if you’re going to Vietnam. Other than that, it’s useless as an investment. The Vietnamese government might attempt to redenominate it again, but as we’ve discussed with the dinar, redenomination is not the same as revaluing – one is a real and legitimate technique to bring down inflation, the other is pie in the sky nonsense.

Stacks of Indonesian rupiah

Indonesian rupiah
The rupiah is the currency of Indonesia, and while its pimping and selling are not quite at the level of the dinar or dong, don’t be shocked if it gets there. Way back in 1949, when Indonesia first gained independence, the rupiah traded for about 3.8 to one dollar. But hyperinflation hit almost immediately, and soon price controls had to be introduced. In the 70s, the rate was about 415 to the dollar, dropping even further going into the 80s. Despite Indonesia having a strong economy, the rupiah continued to drop in value, and crashed completely in August 1997.

In 2015, there was something of a gain, as money flowed into the country before its presidential election. But post-election, the rupiah crashed again, and hit a low of 13,000 to the dollar. Compare this to their value a year ago, which was 11710, and you have another currency that would have lost you much of your investment.

The country had vowed to redenominate the rupiah, but put that on hold while its economy stabilizes. In the meantime, unless you’re an experienced foreign currency trader (and chances are if you’re reading this, you’re not), stay away from the rupiah.

The infamous Zimbabwean 100 trillion dollar note

Zimbabwean dollar
Everyone likes a big number, and the bigger, the better. So it made news when Zimbabwae, hit with crippling inflation, introduced a 100 trillion dollar note, it made international headlines. It was also the beginning of the end for the currency, as in 2009, Zimbabwe announced they’d be phasing out their currency altogether, and relying on foreign currencies like the US dollar. The zim will become completely demonetized by the end of 2015, though there are unwelcome rumors that the country is experimenting with printing new (most likely much lower) denominations.

At this point, Zimbabwean dollars are worthwhile only as collector’s items. They literally are about to have no value as actual money, and the country is attempting to get the last notes out of circulation. This admittedly makes those 100 bazillion dollar notes valuable, and the highest ones go for around 20-25 bucks on eBay. But even then, the market is flooded with them. You’re not going to get rich off any money coming out of Zimbabwae. Nobody ever has.

Something else
The Chinese yuan, South Korean won, and various other Asian and Middle Eastern currencies are also mentioned as being the “next currency” to be revalued, despite nothing being the previous one. Chances are, it won’t happen, for both simple and complex reasons.

As always, be skeptical of anyone touting the benefits of buying large amounts of a cheap currency with lofty promises for the future. They’re almost certainly not true.

About Mike Rothschild

Mike Rothschild is a writer and editor based in Pasadena. He writes about scams, conspiracy theories, hoaxes and pop culture fads. He’s also a playwright and screenwriter. Follow him on Twitter at twitter.com/rothschildmd.

 

Rod-as-Sam sm

 

Trials For Dinar Holders

ISIS Leader

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

http://www.forbes.com/sites/johnwasik/2014/07/28/the-dinars-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.”

http://www.bbc.com/news/world-middle-east-24179084

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!

The Kuwaiti Dinar NEVER Revalued!

Earlier today I received an email from Baghdad Invest. He left a link to an article written by Mr. IQD. After reading Mr. IQDs article I Just had to leave a comment. I came back later in the day only to find that the comment had vanished. It is missing! I don’t know what happened but I now feel a need to respond to this in an effort to set the record straight.

Mr. IQD posted an old article he found through a person who goes by the name “MyDigitalDr” Mr. IQD makes the claim that this article validates and confirms that Kuwait did indeed revalue their currency. The link to the article is found here.

http://www.nytimes.com/1991/03/25/world/after-the-war-no-electricity-but-kuwait-reopens-its-banks.html

Here are is a small part that was quoted by Mr. IQD

All other old dinars can be exchanged for new ones on a one-to-one rate until May 7, when the old dinars become invalid. The new official exchange rate is 3.47 American dollars for one new Kuwaiti dinar.

Mr. IQD goes on to say the following.

Now you can know with CERTAINTY that Kuwait did in fact “RV” their Currency for 3.47 KWD to $1.00 USD – and friends I’ve been searching for this fact based article for years, and poof, out of the blue, “MyDigitalDr” on LJ’s Board found it and posted it.  So, thanks to you, whoever you are.  Also, thanks to the NY Times for including it in their Archives – that is really awesome!

To those out there who claim that it is just not “possible” for Iraq’s Central Bank to “RV” the IQD because it has “never been done before” – THEN TELL THEM TO READ THIS NEW YORK TIMES ARTICLE, AND SEE HOW THEY RESPOND!!!…

http://mriqd.com/2014/06/30/eureka-ny-times-article-confirms-kuwaits-1991-iqd-rv/

Well I left a response in the form of a comment and it was rather long. I made every effort to be polite. I came back later and found that my comment was no longer there. So I will now include my original comment

The Kuwait RV was one of the reasons I invested in the dinar in the first place. It was articles like this that caused me to have confidence in my investment. On the surface this does look like an RV. But the fact remains that Kuwait never revalued their currency. Kuwait redenominated their currency. What is an RV? It is a policy decision from the central bank to change the value of its currency. It can only happen to pegged currencies. This is because the market determines the value for all those currencies that float. This is the standard definition of an RV.

The Kuwaiti Central Bank NEVER adjusted the rate of the dinar. The rate plummeted when Saddam invaded the country and took over the central bank. Everyone was instructed to trade the Kuwait dinar for Iraqi dinar in October of that same year. Speculation drove the price down. Once Iraq was kicked out of Kuwait it took 7 months to get the country up and running again. They had to put out fires because the oil wells were set ablaze. The value of the Kuwaiti dinar was reestablished after Iraq left. The Kuwaiti central bank redenominated the currency because Saddam left with a lot of Kuwaiti dinar. But in the exchange there was no change in value.!

Even Wikipedia acknowledges that this was a redenomination and not a revalue. This scenario is a lot different then what gurus say is going to happen to the dinar. The claim is the dinar will revalue which is due to a policy decision. That is not what happened in Kuwait. The Kuwaiti dinars change in value was due to speculation in the currency itself. It is nothing the central bank controlled. When the country was invaded the value fell because no one new Kuwait’s future. When Kuwait recovered the value came back. The central bank had nothing to do with the change in value! It was perception of a fiat currency and the fact that people lost faith in the Kuwaiti dinar that changed its value.

So there was never a Kuwaiti revalue! And given the very definition of revalue it has never happened before on the scale of what people expect from the dinar. There has never been a revalue over 50 percent.

We need to also consider that Iraq has over 34 trillion dinar in circulation. The dinar is backed by U.S. dollars. They don’t have enough dollars in their reserves to back any kind of significant revalue. Given the fact that there is only around 12 trillion U.S. dollars in America’s M2 money supply it is highly unlikely that Iraq will ever get enough reserves to revalue to any significant level

At least 28 trillion of the Iraqi dinar in circulation today is outside of Iraq’s border. When dinar is exported it is exchanged for US dollars. That money goes straight into their reserves. I agree that Iraq will take the path of Kuwait. They will redenominate their currency. When they do this they will not honor the currency outside of their border and they will cite their currency laws as the reason. Then they get to keep all of that reserve that was collected over the years due to the export of their currency.

Now this comment is gone. For some reason It vanished. So allow me to elaborate a little more. I bought Iraqi dinar based on a lot of lies that I believed. I fell for it hook line and sinker and at the time I knew nothing about how currencies actually worked. I spent 4 years researching economics after I purchased dinar.

Two years after my purchase I am researching economics and I discovered that there was never a Kuwaiti Revalue. In fact I began to research the other lies I was told only to find out that nothing that I was told was even true! That is when I decided to sell my dinar and I started posting the truth about this fraudulent so-called investment on my blog. I spent about two years posting the facts instead of make believe wishful thinking. So now let’s go a little deeper.

The paragraph in question is this one

All other old dinars can be exchanged for new ones on a one-to-one rate until May 7, when the old dinars become invalid. The new official exchange rate is 3.47 American dollars for one new Kuwaiti dinar.

Notice that they are changing out an old currency for a new currency. This is a redenomination it is not a revalue. Revalues are slight adjustments in the value of currency and they only happen to pegged currencies to combat inflation. Now notice these two paragraphs from the New York Times article.

The Central Bank is canceling the value of Kuwaiti dinars that were seized from the Central Bank and put into circulation by the Iraqis. The invalid serial numbers were posted today in front of all banks in the city.

All other old dinars can be exchanged for new ones on a one-to-one rate until May 7, when the old dinars become invalid. The new official exchange rate is 3.47 American dollars for one new Kuwaiti dinar.

So all the dinar was exchanged with no change in value! One old Kuwaiti dinar was equal to one new Kuwaiti dinar! Wikipedia says,

The third series was issued on 20 February 1980, after the accession to the throne of Emir Jaber al-Ahmad al-Jaber al-Sabah, at that time in denominations of 1⁄4, 1⁄2, 1, 5 and 10 dinar. A 20 dinar banknote was introduced on 9 February 1986. As a result of the state of emergency after Iraq’s invasion of Kuwait, this series was ruled invalid with effect from 30 September 1991. Significant quantities of these notes were stolen by Iraqi forces and some have appeared on the international numismatic market.

http://en.wikipedia.org/wiki/Kuwaiti_dinar

So the fourth series was introduced with no change in value! The same denominations were issued in a new series. This is because Saddam had stolen a lot of Kuwaiti dinar. That was the reason for the redenomination. So let’s recap the actual events

  • 1. Saddam’s forces invade Kuwait and they over run the country.
  • 2. While some people were captured a lot of people flee taking with them as much money as possible (Kuwaiti dinar)
  • 3. Because Saddam’s forces occupy Kuwait the value of their currency begins to fall. Those outside Kuwait exchange dinar for a lower rate.
  • 4, In October of that same year Saddam makes the Kuwaiti dinar illegal and he orders that all Kuwaiti dinar must be exchanged for Iraqi dinar. He pegs the Kuwaiti dinar to the Iraqi dinar. As a result the Kuwaiti dinar which is still in circulation falls to its lowest level.
  • 5. American forces liberate Kuwait. When Saddam’s forces leave they take a lot of Kuwaiti dinar with them. This dinar was stolen from the Kuwaiti Central bank.
  • 6. The Kuwaiti government is put back in power and the Kuwaiti dinar is restored to its original price before the central bank was shut down because of Iraqi troops.
  • 7. There was a redenomination for the sole purpose of invalidating the entire dinar supply that was stolen from Kuwait. The important point is when the redenomination occurred there was no change in value. The old dinar was worth just as much as the new dinar. Here are two more articles to go with the New York Times Article.

http://articles.latimes.com/1990-09-25/news/mn-1116_1_kuwaiti-dinar

http://articles.latimes.com/1991-03-24/news/mn-1395_1_kuwaiti-banks

This is a lot different then what people are claiming the Iraqi dinar is going to do! Gurus claim that a policy decision made by the central bank will raise the value of the over 70 trillion dinar anywhere from 100,000 to 400,000 percent. And this has never happened before! This is not what happened in Kuwait! It will not happen for obvious reasons. First the amount of hyperinflation that will come from a move like this will destroy the currency. Second nations want to have the lowest currency because it helps them with exports which strengthens their economy and provides jobs.

So if this post came up during a Google search and you friends are trying to tell you to buy dinar or you are new to the dinar world, I am providing this warning for your benefit. Run away from this so-called investment! There is nothing but hype and rumor that is repeated over and over again just to sell this worthless paper.

If you still believe the dinar will revalue after reading the articles I posted or watching events like ISIS unfold in Iraq then for one last time I appeal to your common sense. It is time to set aside all the lies and seek out the truth. Wishful thinking is not going to make you rich. Denying facts won’t help you get the things in life you want. Pipe dreams filled with hype have no chance of coming true. It is high time to face reality and set aside the foolish notion that over 70 trillion dinar is magically going to be worth anywhere from 70 trillion to 280 trillion U.S. dollars. I know what I am saying is not popular and it is not what dinar investors want to hear. But God as my witness, I am speaking the truth! ultimately it is the truth that will set you free!