Hand Writing On The Wall

While there are still some who speculate on the dinar, its fate could not be more certain. I came to my conclusion a few years back. I stopped following the dinar because of other things going on in my life. I devoted a lot of time to my music. I developed a brand new website and I am getting ready to release an album. I wrote all the music for this album and all the guitar parts are done only using nylon string guitars. I also wrote a book about music that will be available soon. So as you can see I have been busy.

It has been a while since I looked at the dinar. I have been out of touch for a while, but yesterday I had a little time on my hands. I began to poke around to see if there was anything new going on. I went to the CBI website and pulled the numbers. I looked at a few other things. I was not aware of everything that is going on with this currency, but the few hours I spent looking into it yesterday was enlightening to say the least.

For starters the central bank is pulling all 50 dinar notes out of circulation and declaring them invalid. Everyone has 2 months to exchange their notes. The trade in period starts on March 1st 2015 and goes until into April 30th 2015. After that time period expires the notes are invalid. These notes are only worth about 4 cents each. There are many people who got lower denominations here in the United States because they were told by the gurus that they would be more secure and more valuable than the larger notes after the RV.

Is this a prelude for what is to come? Even if all dinar dealers were to offer a way to trade in the notes that are higher in value, (which I highly doubt) what guarantees are there that they could provide this service during the allotted trade in period?  If you want to trade in all your 50 dinar notes then gather them together and head over to Iraq. You now got less than 2 months to get this done. After you accomplish this I hope you enjoy your new-found ummm……wealth?……

I hope that people now begin to see the absurdity of the revalue. I hope that through the removal of the 50 dinar notes they begin to see how hard it would be to exchange these notes. I have said this all along. Check the link for more info.

http://wkrn.membercenter.worldnow.com/story/28249986/central-bank-of-iraq-to-remove-50-dinar-banknotes-from-circulation-on-april-30-2015

In other Dinar related news Sam I am is closing up shop. He is moving on to bigger and better things. Dinar Douchebags is closing down. Sam was always a straight shooter and I am sad to see what has become probably the best dinar site on the internet close down. I understand the need to move on with life. So I wish Sam the very best in his new adventures and I want to thank him for his relentless pursuit of truth.

One of the great things about Sam’s site was not only the articles that he posted but also the people who commented on his site. There were many educated readers that also backed Sam and provided even more proof for the things he uncovered. People like Brian and JRG always had a way to cut through the bull and present a logical case. I have always had the greatest respect for the people over there.

So hats off to Dinar Douchebags and their readers and a toast to all of you for your relentless pursuit of truth!

What’s Going On?

Well with all this new found information I decided to do a little digging. The first thing I did was to get the latest numbers from the CBI. I downloaded the statistics document and gave it a quick look. It was very revealing. I am about to show you something using the CBI’s own numbers. This is what I found,

According to line 79 (the money outside of banks in circulation) there has been some drastic changes! take a look,

Oct 35,381           Nov 34,682           Dec 35,378          Jan 35,623

The numbers above are in trillions. So for October the CBI had 35 trillion 381 billion outside of the bank in circulation. This is a time period from October of 2014 to Jan of 2015. Now look at November. That is roughly a 700 billion dinar reduction. I have been following the dinar since 2010 and there is only one other time when I have seen a drastic reduction like this. And that is when Maliki tried to take over the CBI and the whole thing resulted in Shabibi leaving the CBI. That was back in 2012. What is going on over there? It gets better,

Look at these numbers from 2014. All numbers are in trillions.

Line 86 M1 money supply  Oct 71,179       Nov 70,182          Dec 72,651

Line 87 M2 money supply  Oct 88,964       Nov 88,007          Dec 91,704

It seems that there was a drastic and sudden reduction in the dinar in November of 2014. Their M1 was reduced by almost 1 trillion dinar! What would cause such an event?

Here is another piece to the puzzle. The CBI’s reserves are shrinking! Check out this IMF document for proof.

http://www.imf.org/external/np/vc/2015/011115.htm

I am going to quote from this document

“The recent collapse in world oil prices has added to the tensions caused by the ISIS insurgency and is complicating efforts to deal with it. With oil export revenues accounting for more than 90 percent of total government revenues, Iraq has always been highly vulnerable to oil price volatility. Falling oil prices are already reducing government revenues”

Here is another quote

“international reserves have fallen from over $77 billion at end-2013 to about $67 billion at end-November due to the combination of lower oil revenues and relatively high imports, particularly by the government. These figures exclude the Development Fund for Iraq (DFI) which was created in 2003 mainly to funnel Iraq’s oil revenues and serve the function of a fiscal buffer. The DFI was already down to $6.5 billion at end-2013, and declined further to about $4 billion in November.”

Analysis

The combination of falling oil prices and ISIS has hit Iraq hard. So much so that Iraq is now tapping into their currency reserves. The impact of falling oil prices and ISIS has forced Iraq’s hand. They are now spending some of the reserve money used to back their currency! Their reserves have about a 10 billion dollar reduction!

I knew that falling oil prices were having a global impact. Russia, Iran, ISIS, and Iraq were all affected. Now I am looking at the evidence. Iraq is having money problems. Their revenues have decreased due to falling oil prices. They had to cut their budget and rethink some things. I suspect that things came to head in November of 2014 and some adjustments were made.

Moving on

As I continued digging around I found that there are several rumors that Iraq is still going to go ahead with the 50,000 dinar note. I could not find any proof to verify this. This was mainly rumors that circulated in forums. We all know how reliable those are!

I also found a lot of people saying that there is a dinar shortage of sorts. It is hard to get dinar from the dealers and there is a waiting period. Once again, we all know how reliable rumors are!

So I did a quick search on eBay and I found over 9,000 auctions all from individuals selling dinar. I remember the days when there were a few hundred auctions selling dinar. Now people are trying to unload the stuff. I found one auction that was even trying to sell the 50 dinar notes. The guy wanted 69 cents for each note. This guy was going to get his RV one way or another!

Final Conclusion

If the dinar is truly hard to get from the dealers then that means that the dealers are not buying back large quantities and they don’t want to hold a large supply of dinar. They only want enough to meet current sale demands. If this is even true you got to ask yourself what do the dealers know that we don’t know? Once again this could all be just rumors

This part is fact. Right now money is tight in Iraq. They are suffering from a shortage of US dollars due to the falling oil prices. Now they are tapping into their reserves. (check the IMF link) They have a policy of covering the dinar 100 percent with U.S. reserves, but now according to some sources there seems to be a shortage of reserves by about as much as 10 billion! I am not so sure the number is that high but there is a significant reduction.

This means one of two things. First they are going to change their policy and not cover the dinar with reserves 100 percent, or second they are going to go ahead with a redenomination sometime this year. My guess would be in the middle of summer or by the end of September.

If Iraq does release a 50,000 dinar note like some of the rumors say then there won’t be a redenomination and they are going to change their policy to reflect the reduction of reserves. If I were to place a bet then my money would be on the redenomination. This course of action would help Iraq strengthen their currency which is something they desperately need at the moment. The truth is no one knows for sure what Iraq is going to do.

If Iraq does redenominate then expect a short trade in period. There may be a few dealers that will try to cash in on this, but in the end there are no guarantees! Could this be the reason dealers are not buying as much dinar back as they use to? Could this be the reason there are over 9,000 dinar auctions on eBay? No one knows

This whole dinar ride may be over soon. It may all end by the end of the year! Yes my conclusions does have a lot of speculation based on some of the rumors. Only one thing is for certain. This dinar ride has made me sick! It is time for me to go throw up now. If you have a sick feeling in the pit of your stomach don’t ignore it! There still may be time to get out.

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!